FCA receives 76 suspicious transaction and order reports concerning FX in 2019

The UK Financial Conduct Authority (FCA) today published its suspicious transaction and order reports (STORs) figures for the year ending December 2019, revealing a slight increase in such reports in the FX segment.

The 2019 figures reveal the number of FX STORs amounted to 76. This is slightly up from the 72 such reports received by the FCA in 2018. The bulk of FX STORs concerned market manipulation.

The STOR regime requires market participants to identify and report suspicions of potential market abuse to the FCA. Since 2016, the regulator had seen an annual increase in the number of STORs from market participants, however figures for 2019 show the first decrease in the total number of reports. Across all asset classes, the number of STORs for 2019 was 5,455, compared with 5,926 in 2018.

There may be several reasons for the decrease, including the fact that the FCA has observed some firms taking more robust steps to tackle financial crime risks following the publication of chapter 8 of the Financial Crime Guide in December 2018 and the associated supervisory activity.

The FCA highlighted firms’ obligations to counter the risk of being used to further financial crime, including the criminal offences of insider dealing and market manipulation. The steps taken by some firms, since then, include reviewing the suitability of clients whose trading may otherwise have been subject of a STOR and restricting their access to financial markets where appropriate. The FCA believes these restrictions have resulted in less suspicious activity being facilitated by these firms, and consequently a reduction in STORs.

The FCA reports an increase in the number of market observations received in 2019. The regulator launched the Market Observation form in 2019, having recognised that firms often want to submit information about market activity they have observed which is not necessarily appropriate as a STOR.